Ask:
The lowest price anyone will accept before they sell a stock. Together, the bid and
ask prices are referred to as a 'quote'.
Bear market: A market in which prices are falling due to a general desire to sell stock.
Bid: The highest price anyone is willing to pay in order to buy a stock. Together, the bid and ask prices are referred to as a 'quote'.
Board lot: A unit of trading. Board lots on The Toronto Stock Exchange are:
Bonds: Promissory notes issued by a corporation or government to its lenders, usually with a specified amount of interest for a specified length of time.
Bull market: A market in which prices are rising due to a general desire to purchase stock.
Capital gain or loss: Profit or loss resulting from the sale of an asset, such as a security.
CATS (Computer Assisted Trading System): The TSE system, introduced in 1977, which allows traders to buy and sell TSE-listed stocks through customized trading terminals which can be located in member firm offices anywhere in the world.
Common Shares: Securities which represent part ownership in a company and generally carry voting privileges.
Day order: An order to buy or sell a security valid only for the day the order is given.
Dividend: A portion of a company's profit paid to the shareholders.
Electronic book: The TSE's central file of buy and sell orders for floor-traded securities. Orders may be entered directly from the floor or electronically from member firm offices.
Equities: Common and preferred stocks, which represent a share in the ownership of a company.
Ex-dividend: Without dividend. The buyer of shares quoted ex-dividend is not entitled to receive an already declared dividend. When shares are cum-dividend, the purchaser will receive the declared dividend.
Floor trader: A brokerage firm employee who works on the stock exchange trading floor and is responsible for executing buy and sell orders on behalf of the firm and its clients.
Futures: Contracts to buy or sell specific quantities of a commodity or financial instrument with delivery delayed until a specified time in the future.
Index: Statistical measure of the state of the stock market or economy, based on the performance of stocks or other components. Examples are the TSE 300 Composite Index and the Toronto 35 Index.
Limit order: An order to buy or sell securities in which the client has specified the price. The order can be executed only at the specified price or a better one.
Liquidity: The measure of how quickly an investor can turn securities into cash. A security is liquid if it can be bought and sold quickly with small price changes between transactions.
Long: A term signifying ownership of securities. "I am long 100 XYZ" means that the speaker owns 100 shares of XYZ.
LOTS (Limit Order Trading system): The automated TSE trading system that handles limit orders for floor-traded stocks.
Margin: The amount paid by clients when they use credit to buy a security, the balance being loaned by their broke".
Market order: An order to buy a security immediately at the best possible price.
Market-By-Price (TM): The TSE's market information display available to the public, showing total volume bid and offered for TSE stocks at each of five price levels.
MOST (Market Order System of Trading): The automated TSE trading system that provides guaranteed immediate fills for small client market orders for floor-traded stocks at the current bid or offer for amounts up to a pre-set limit.
Mutual Fund: A fund managed by an expert who invests in stocks, bonds, options, money market instruments or other securities. Mutual fund units can be purchased through brokers or, in some cases, directly from the mutual fund company.
Odd lot: A number of shares less than a board lot.
Open order: An order to buy or sell a security at a specified price, valid until executed or cancelled.
Options: Contracts which give the holder the right to buy (call options) or sell (put options) a fixed amount of a certain stock at a specified price within a specified time.
Over-The-Counter: The over-the-counter (OTC) or unlisted market is the market maintained by securities dealers for issues not listed on a stock exchange.
Preferred shares: Shares that carry dividends at fixed rates which must be paid before any dividends are paid to common shareholders.
Price/earnings ratio: A common stock's current market price divided by the company's annual per share earnings.
Prospectus: A legal document describing securities being offered for sale to the public. It must be prepared in accordance with provincial securities commission regulations.
Registered Representative: A salesperson or broker employed by an investment firm. Salespersons must be registered with the provincial securities commission.
Right: A temporary privilege granted to existing common shareholders to purchase additional shares directly from the company at a stated price.
Settlement date: The date on which a securities buyer must pay for a purchase or a seller must deliver the securities sold. In general, settlement must be made on or before the fifth business day following the transaction date.
Short sale: The sale of shares which the seller does not own. The seller is speculating that the stock price will fall, in the hope of later purchasing the same number of securities at a lower price, thereby making a profit. Sellers must advise their brokers when they are selling short.
Spread: The difference between the bid and the ask prices of a stock.
Stock/Share: A share in the ownership of a corporation. The certificate(s) representing ownership in a corporation.
Stock yield: The percentage of the dividend paid in relation to the price of the stock. For example, a stock selling at $40.00 a share with an annual dividend of $2.00 a share yields five percent.
TIPS (Toronto 35 Index Participation Units): A TSE investment vehicle that allows investors to buy a single security representing the diversified portfolio of Canadian companies comprising the Toronto 35 Index.
Transfer agent: A trust company appointed by a company to keep a record of the names, addresses and numbers of shares held by its shareholders. Transfer agents are often responsible for distributing dividend cheques.
TSE 300: An index which illustrates trends within the Toronto Stock Exchange by tracking the progress of 300 highly influential stocks which are traded on this exchange.
Underwriting: The purchase for resale of a new issue of securities by an investment dealer or group of dealers.
Warrant: A certificate giving the holder the right to purchase securities at a stipulated price within a specified period of time. They are often detachable and may be traded separately.